Money supply refers to the total stock of money held by 'Public'. Which of the following is/are part of the term public in this context?
1. Households
2. Non-Banking Financial Companies
3. Commercial Banks
4. Reserves of IMF in Indian currency kept with RBI
Select the correct answer using the code given below:
3 and 4 only
Incorrect Answer1, 2 and 3 only
Incorrect Answer1, 2 and 4 only
Correct Answer1, 2, 3 and 4
Incorrect AnswerExplanation:
The supply of money refers to the total stock of money held by the public. The term public includes: Households, firms, local authorities, non-banking financial institutions, non-departmental public sector banks, reserves of foreign banks, governments and IMF, etc. held in Indian rupee held by the RBI. The term excludes suppliers of money such as Central Government, RBI and the Commercial banks.
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By: Japjeet Singh